Representatives of the Kenyan industry warn that proposed licensing rules could exclude startups, concentrate the market among well‑funded firms, and push users toward offshore platforms.
Strict Licensing and Oversight RequirementsThe Virtual Asset Association of Kenya (VAAK), which represents about 50 firms, warned that the capital demands, combined with insurance and compliance costs, risk excluding startups from the formal market. According to the association, this could drive users toward offshore or unregulated platforms, undermining the consumer protection goals regulators seek to achieve.
Balancing Innovation and Investor ProtectionIn October 2025, Kenyan lawmakers passed the VASP bill, which President William Ruto signed into law later that month. While the VASP Act is legally in force, it serves as a parent law, meaning the National Treasury must develop specific rules before the government can begin licensing firms.
On March 17, 2026, the National Treasury unveiled the Draft Virtual Asset Service Providers Regulations, 2026. Stakeholders and the public have until April 10, 2026, to submit feedback.
Once the public consultation period ends, the Treasury and the Multi-Agency Task Force will finalize the regulations. Only after these are formally published in the Kenya Gazette will the CBK and the CMA begin accepting license applications.
FAQ What are Kenya’s draft VASP regulations? They are proposed rules requiring crypto firms to hold large paid‑up capital before licensing. Why is the industry concerned? Startups fear the high capital thresholds will push them out and favor big players. What do regulators aim to achieve? Authorities say the rules will protect investors and stabilize Kenya’s fast‑growing crypto sector. What happens next? Public feedback runs until April 10, 2026, after which final rules will be gazetted and licenses issued.
